Loyalty Systems

Real loyalty is mutual. The following stories illustrate how Lichen will help online buyers and sellers build comfortable market relationships and develop shared interests.

Building Mutual Loyalty:
Once it’s launched, Lichen could be used to cultivate more refined loyalty between customer and merchant.

Finally Lucia feels that she can tailor her favourite clothing retailer’s customer-affinity program to match her inclinations. Setting her own preferences in Lichen, she can choose to receive notifications for precisely the sorts of promotions that she’d be interested in, and she can set filters for promotional notifications that would probably annoy her.

The steps are simple. She selects “My Loyalty Profile”, and then “Loyalty Options”. By completing a short questionnaire, Lucia informs the retailer about what sorts of notifications are most likely to get her buying attention, which ones she’d be willing to think about, and even which sorts of notifications they should not bother offering her.

The form lets her identify the sorts of things she’d always look for as price-cutting deals, and which higher-end things she might like to treat herself to from time to time. The questionnaire also asks her whether she’d like to restrict this nuanced data to the one merchant, or let the retailer explore further afield.

She also selects the “Surprise Me” option so that, with her permission, notifications fitting her preferences might come from other retailers. Her own retailer earns a referral fee on that information, and she’s fine with that because the retailer offers her a stream of program points for every part of the questionnaire she answers, and more points yet for selecting the “Surprise Me” option.

In asking her these questions, this retailer has already augmented her sense of loyalty by demonstrating that they respect her personal boundaries as a marketing target, as well as her right to choose to pass along her private info for access to specified benefits. All this represents the company’s way of saying that she and her favourite retailer are loyal to each other, and it empowers them both to refine what that leads to.

The Big Shot:
Once it’s launched,  Lichen could be used by companies to give ‘customers care’ a whole new meaning.

It used to be that since all the big hardware chains were carrying pretty much the same tools, materials and widgets, Anthony would get loyalty cards for all of them, keep an eye open for the promos, so that whenever he needed something, he’d choose a store based upon price alone.

This year the hardware store that everybody most took for granted did something special. They announced that at the check-out, and through mobile and online purchases, they would offer customers the choice of regular loyalty points, or the opportunity to earn fractional shares in the company.

That got him thinking. Looking at the fine print, he saw that each dollar spent at this store would also automatically buy him what they called a “micro-debenture” equal to the value of a thousandth of a genuine equity share in the company on that day. It said that, as he gathered enough micro-debentures, these would be automatically converted into a real equity share in the company—an item listed on the public stock exchange.

“It was funny”, he told his buddies at the pub. “When I started, well sure, I only had a few measly micro-thingys. But suddenly I was paying attention to all the market news. I actually cared about my hardware store.”

Without saying anything, several of his pals wondered if he was now just going to promote ‘his’ hardware store to them. He quickly cleared up any doubts: “So, guys, now I want all of you to go and buy ALL your hardware needs from my store. I’m part owner, after all!”
Since he was now such a big shot, the group decided that he’d have to buy them a round of beers. The following week, though, four of the others had signed up to start collecting.

From then on, part of the weekly banter at the pub involved debating their expert business views about ‘their’ hardware store’s performance, and what it could do better. That didn’t stop a year later, when the bunch of them sold all their shares on a high, and put the proceeds towards the kid’s soccer club.

Noisy Birds:
Once it’s launched, Lichen could be used to improve customer communication to merchants.

The sales director’s daughter was pursuing a systems-engineering degree with a specialization in information theory. During a summer visit home, between university terms, she tried to explain the concept of “signal-to-noise ratio” in terms her dad would probably understand.

“Let’s say I sign up to a store’s loyalty program with my name and my email”, she said. “And let’s say they track what I look at on their website, and they relate that to data about what I’ve bought in the past.”

“Then they’ll know what you’re interested in”, he said.

“Well, not so much”, she replied. “I really hate it when I look for something and buy it from somewhere, but then all the damned sites I visited keep pushing at me what they assume I’ll be wanting. In most cases, after I’ve already searched and purchased, any promotions directed at me relating to that thing are just noise, whatever the price discount!”

“Oops”, said her dad.

“But”, she added, “I do know what I like. Using Lichen, I can manage my own set of rules and tell retailers what sorts of signals I think I might respond to”.

“Then they wouldn’t have to do so much work trying to figure out the mind of a 27-year-old who knows what she wants”, he caught on.
“Less noise: Better signal”, she said.

Retailer dad went further: “Well, then millions of customers’ profiles together provide that retailer the insight they need to fine tune both their product line and their promotions to suit the ‘buy signals’ their customers have provided.”

“Yes, that’s the signal side”, she replied. “But you’ve also got to keep reducing the noise.” Just as she said that, two blue jays started cawwing loudly at each other.

“Sorry, what did you say?” he asked.

She clapped her hands twice loudly to scare away the birds.

“I said that’s the signal side, but you’ve also got to keep reducing the noise”, she repeated. “You know, I do like blue jays. But sometimes they can be really annoying. So imagine that a particular promotional campaign results in a lot of customers adjusting their settings to filter out just those sorts of promotions.”

He jumped in: “The savvy retailer finds out exactly what annoys his customers.”

“Her customers!”, she noted. “You see, even when I was speaking clearly just now, the noise from those birds drowned me out.”

“You should study marketing”, he said.

“You should have studied engineering”, she laughed.

Once it’s launched, Lichen could be used to make crowd-funding autonomous, straightforward and free.

Fernando and Nguyen used the ‘Xalgo4Donations’ template to craft a simple rule. This year, for every $500 they spend at restaurants or at sports events, they’ll contribute $10 towards the Youth Assistance Center (YAC). Whether they are at home or away, alone or together, Lichen engages their ‘Xalgo4YAC’ rule to automatically tally their combined spending with any stores or organizations that have been incorporated under either of these ISIC codes:
  • R931 – Sports activities
  • I56 – Food and beverage service activities
Every time during a year that their combined total outlays to vendors in those categories reaches $500, Nguyen receives an approval notice for a $10 bank transfer from their joint bank account to the Youth Assistance Center. She is prompted to approve or decline with a single touch or click, and a passphrase. When she approves, the rule activates the pre-authorized payment routine that she already set up through online banking. Xalgo4YAC also sends data about the donation to her electronic book-keeping service.
Last month Fernando shared a link to the Xalgo4YAC rule on a community news site, and already 143 other people subscribed, resulting in a steady stream of donations from community members loyal to youth in the region.


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